2017 (9) TMI 860 - AT - Central Excise

Appeals Dismissed for Fraudulent Cenvat Credit; Penalties Upheld

Emkay Fastners Pvt. Ltd., Shri Harikrishna Bhilalbhai Soneji, Shri Mohsin Hajibhai Memon, Shri Mohammadbhai Abdullali Master, Shri Suresh A. Bundiwal And Shri Pradeep Mishra Versus Commissioner of Central Excise, Thane-I

Emkay Fastners Pvt. Ltd., Shri Harikrishna Bhilalbhai Soneji, Shri Mohsin Hajibhai Memon, Shri Mohammadbhai Abdullali Master, Shri Suresh A. Bundiwal And ... Issues Involved:1. Fraudulent availing of Cenvat Credit2. Non-receipt of goods3. Evidence of transportation and receipt of goods4. Denial of cross-examination5. Limitation and penaltyIssue-wise Detailed Analysis:1. Fraudulent Availing of Cenvat Credit:The appellants were accused of availing Cenvat Credit on invoices issued by M/s. Jindal Iron & Steel Co. Ltd. and M/s. Jindal Steel & Alloys Ltd. without actually receiving the goods. The investigation revealed that the goods mentioned in the invoices were delivered to different parties, not the appellants. The Tribunal upheld the findings of the lower authorities, confirming that the appellants fraudulently availed Cenvat Credit without receiving the materials.2. Non-receipt of Goods:It was established that the goods covered by the invoices were not received by the appellants. The investigation showed that the goods were delivered to parties in Viramgam instead of the appellants' factory. The appellants failed to provide any evidence of receiving the goods, such as gate registers, goods receipt notes, or lorry receipts. The Tribunal noted that payment through banking channels does not prove the genuineness of the transactions in such manipulated cases.3. Evidence of Transportation and Receipt of Goods:The Revenue presented substantial evidence, including transporters' records and statements from various individuals, proving that the goods were transported to locations other than the appellants' factory. The Tribunal highlighted the absence of any documentation from the appellants to contradict the Revenue's claims, reinforcing the conclusion that the goods were not received by the appellants.4. Denial of Cross-examination:The appellants argued that they were denied the opportunity to cross-examine witnesses, which they claimed was a violation of natural justice. The Tribunal dismissed this contention, stating that the appellants did not produce any evidence to contradict the Revenue's claims. The Tribunal cited previous judgments, noting that the denial of cross-examination did not prejudice the appellants' case, as they failed to provide any evidence of receiving the goods.5. Limitation and Penalty:The appellants contended that the demand was time-barred. However, the Tribunal rejected this argument, stating that the case involved clear fraud, and the extended period of limitation was applicable. The Tribunal upheld the penalties imposed by the lower authorities, emphasizing that the appellants availed Cenvat Credit without receiving the goods, constituting a fraudulent act.Conclusion:The Tribunal dismissed the appeals, confirming the findings of the lower authorities. It was established that the appellants fraudulently availed Cenvat Credit without receiving the goods, and the substantial evidence presented by the Revenue supported this conclusion. The Tribunal upheld the penalties and rejected the appellants' arguments regarding the denial of cross-examination and the limitation period. The appeals were dismissed in toto.